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Flood Letter Not Furnished
Answer by Dan Persfull, BOL Guru
Guru Bios
Question: If a lender fails to furnish a borrower/buyer with the standard flood hazard determination letter (which, in this case would have disclosed that the property being purchased was located in a flood zone) and the buyer purchases the property, does the lender have exposure to its customer for failing to disclose this fact or is the lender only out of compliance with the federal government disclosure requirements?
Answer: You failed to comply with a federal law, assuming this is not a land only purchase. What civil liability you may have to the borrower/buyer will be determined by a judge and/or jury. Any civil money penalty will be determined by your regulator.
First published on BankersOnline.com 11/26/07
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